THE CHARLES SCHWAB FAMILY OF FUNDS
Schwab Taxable Money Funds
Supplement dated February 27, 2015,
to the Statement of Additional Information (SAI) dated April 30, 2014
Schwab Tax-Free Money Funds
Supplement dated February 27, 2015,
to the SAI dated April 30, 2014, as supplemented September 29, 2014
Schwab Government Money FundTM (Purchased Shares)
Supplement dated February 27, 2015,
to the SAI dated January 20, 2015
SCHWAB ANNUITY PORTFOLIOS
Schwab Money Market PortfolioTM & Schwab S&P 500 Index Portfolio
Supplement dated February 27, 2015,
to the SAI dated April 30, 2014, as supplemented November 21, 2014
Schwab MarketTrack Growth Portfolio IITM
Supplement dated February 27, 2015,
to the SAI dated April 30, 2014
Schwab VIT Portfolios
Supplement dated February 27, 2015,
to the SAI dated April 30, 2014, as supplemented May 8, 2014
SCHWAB CAPITAL TRUST
Schwab Monthly Income Funds
Supplement dated February 27, 2015,
to the SAI dated April 30, 2014, as supplemented November 21, 2014
Schwab Fundamental Global Real Estate Index Fund
Supplement dated February 27, 2015,
to the SAI dated September 3, 2014, as supplemented November 21, 2014
SCHWAB INVESTMENTS
Schwab Global Real Estate Fund
Supplement dated February 27, 2015,
to the SAI dated June 30, 2014, as supplemented November 21, 2014
Schwab Taxable Bond Funds
Supplement dated February 27, 2015,
to the SAI dated December 16, 2014
Schwab Tax-Free Bond Funds
Supplement dated February 27, 2015,
to the SAI dated December 16, 2014, as supplemented February 13, 2015
LAUDUS TRUST
Laudus Mondrian Funds
Supplement dated February 27, 2015,
to the SAI dated July 29, 2014, as supplemented October 1, 2014
Laudus U.S. Large Cap Growth Fund
Supplement dated February 27, 2015,
to the SAI dated July 29, 2014
This supplement provides new and additional information beyond that contained in the SAIs
and should be read in conjunction with the SAIs.
I. | Revised Board of Trustees Table |
Effective February 6, 2015, Charles A. Ruffel was added to the Board of Trustees. Additionally effective March 9, 2015, Mariann Byerwalter resigned from the Board of Trustees. As such, the Board of Trustees table under the Management of the Funds section in each SAI is deleted and replaced in its entirety with the following table.
NAME, YEAR OF BIRTH, (TERM OF OFFICE AND LENGTH OF TIME SERVED1) |
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS |
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY THE TRUSTEE |
OTHER DIRECTORSHIPS DURING THE PAST FIVE YEARS | |||
INDEPENDENT TRUSTEES | ||||||
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 present); Senior Fellow Stanford Institute for Economic Policy Research (2000 present); Professor of Public Policy, Stanford University (1994 present). | 74 | Director, Gilead Sciences, Inc. (2005 present) | |||
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Private Investor. | 74 | Director, Symantec Corporation (2003 present)
Director, Corcept Therapeutics Incorporated (2004 present)
Director, Adamas Pharmaceuticals, Inc. (2009 present) | |||
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2011) |
Retired. Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services firm for consumers and small businesses) (Dec. 2008 Sept. 2013) | 74 | Director, KLA-Tencor Corporation (2008 present) |
NAME, YEAR OF BIRTH, (TERM OF OFFICE AND LENGTH OF TIME SERVED1) |
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS |
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY THE TRUSTEE |
OTHER DIRECTORSHIPS DURING THE PAST FIVE YEARS | |||
Charles A. Ruffel 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios, Laudus Trust and Laudus Institutional Trust since 2015) |
Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (May 2009 present); Director, Asset International, Inc. (publisher of financial services information) (Jan. 2009 Nov. 2014). | 95 | None. | |||
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (Mar. 1990 present). | 74 | Director, Eaton (2012 present)
Director and Chairman of the Audit Committee, Oneok Partners LP (2003 2013)
Director, Oneok, Inc. (2009 2013)
Lead Independent Director, Board of Cooper Industries (2002 2012) | |||
Joseph H. Wender 1944 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Senior Consultant, Goldman Sachs & Co., Inc. (investment banking and securities firm) (Jan. 2008 present); Partner, Colgin Partners, LLC (vineyards) (Feb. 1998 present). | 74 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 present) | |||
INTERESTED TRUSTEES | ||||||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of The Charles Schwab Family of Funds since 1989; Schwab Investments since 1991; Schwab Capital Trust since 1993; Schwab Annuity Portfolios since 1994; Laudus Trust and Laudus Institutional Trust since 2010) |
Chairman and Director, The Charles Schwab Corporation (1986 present); Chairman and Director of Charles Schwab & Co., Inc. (1971 present); Chairman and Director of Charles Schwab Investment Management, Inc. (1989 present); Chairman and Director of Charles Schwab Bank (2003 present); Chairman and Chief Executive Officer of Schwab (SIS) Holdings Inc. I and Schwab International Holdings, Inc. (1996 present); and Director, Chairman and Chief Executive Officer, Schwab Holdings, Inc. (1979 present). | 74 | Chairman and Director, The Charles Schwab Corporation (1986 present) Director, Yahoo! Inc. (2014 present) |
NAME, YEAR OF BIRTH, (TERM OF OFFICE AND LENGTH OF TIME SERVED1) |
PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS |
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY THE TRUSTEE |
OTHER DIRECTORSHIPS DURING THE PAST FIVE YEARS | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust and Laudus Institutional Trust since 2010) |
Director, President and Chief Executive Officer, The Charles Schwab Corporation and Charles Schwab & Co., Inc. (2008 present); Director, Charles Schwab Bank (2006 present); and Director, Schwab Holdings, Inc. (2008 present). | 95 | Director, The Charles Schwab Corporation (2008 present) |
II. | Revised Individual Trustee Qualifications |
Effective February 6, 2015, Charles A. Ruffel was added to the Board of Trustees. Additionally effective March 9, 2015, Mariann Byerwalter resigned from the Board of Trustees. As such, the Individual Trustee Qualifications section in each SAI is revised to delete all references to Mariann Byerwalter and to insert the following paragraph.
The Board has concluded that Mr. Ruffel should serve as Trustee of the funds because of the experience he gained as the founder and former chief executive officer of a publisher and information services firm specializing in the retirement plan industry, his experience in and knowledge of the financial services industry, and the experience he has gained serving as Trustee of the Schwab Strategic Trust funds since 2009.
III. | Revised Board of Trustees Committee Structures |
Effective February 6, 2015, Charles A. Ruffel was added to the Board of Trustees. Effective February 23, 2015, the Audit and Compliance Committee name was changed to Audit, Compliance and Valuation Committee. Additionally effective March 9, 2015, Mariann Byerwalter resigned from the Board of Trustees. As such, the Trustee Committees section in each SAI is revised as follows:
a. | All references to Mariann Byerwalter are deleted. |
b. | The Audit and Compliance Committee name is changed to Audit, Compliance and Valuation Committee. |
c. | The members of the Audit, Compliance and Valuation Committee shall be Kiran Patel (Chair), John F. Cogan and David L. Mahoney. |
d. | The members of the Governance Committee shall be John F. Cogan (Chair), David L. Mahoney and Joseph H. Wender. |
e. | The members of the Investment Oversight Committee shall be Gerald B. Smith (Chair), Charles A. Ruffel and Joseph H. Wender. |
IV. | Revised Securities Beneficially Owned By Each Trustee |
Effective February 6, 2015, Charles A. Ruffel was added to the Board of Trustees. Additionally effective March 9, 2015, Mariann Byerwalter resigned from the Board of Trustees. As such, the Securities Beneficially Owned By Each Trustee section in each SAI is revised to delete all references to Mariann Byerwalter and to insert the following table as of December 31, 2014.
NAME OF TRUSTEE | DOLLAR RANGE OF TRUSTEE OWNERSHIP IN THE FUND |
AGGREGATE DOLLAR RANGE OF TRUSTEE OWNERSHIP IN THE FAMILY OF INVESTMENT COMPANIES | ||
Independent Trustees | ||||
Charles A. Ruffel | $0 | Over $100,000 |
V. | Revised Proxy Voting Appendix |
The Appendix entitled Description of Proxy Voting Policies and Procedures in each SAI is deleted and replaced in its entirety with the attached Appendix.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
REG85044-00 (02/15) © 2015 All Rights Reserved
00136133
Charles Schwab Investment Management, Inc.
The Charles Schwab Family of Funds
Schwab Investments
Schwab Capital Trust
Schwab Annuity Portfolios
Laudus Trust
Laudus Institutional Trust
Schwab Strategic Trust
PROXY VOTING POLICY AND PROCEDURES
AS OF MARCH, 2015
I. | INTRODUCTION |
Charles Schwab Investment Management, Inc. (CSIM), as an investment adviser, is generally responsible for voting proxies with respect to the securities held in accounts of investment companies and other clients for which it provides discretionary investment management services. CSIMs Proxy Committee exercises and documents CSIMs responsibility with regard to voting of client proxies (the Proxy Committee). The Proxy Committee is composed of representatives of CSIMs Fund Administration, Portfolio Management, and Legal Departments, and chaired by CSIMs Chief Investment Officer, Equities or his/her delegate. The Proxy Committee reviews and may amend periodically these policies. The policies stated in these Proxy Voting Policy and Procedures (the Proxy Policies) pertain to all of CSIMs clients.
The Boards of Trustees (the Trustees) of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, and Schwab Annuity Portfolios (Schwab Funds) have delegated the responsibility for voting proxies to CSIM through their respective Investment Advisory and Administration Agreements. In addition, the Boards of Trustees (the Trustees) of Laudus Trust and Laudus Institutional Trust (Laudus Funds) and the Schwab Strategic Trust (Schwab ETFs; collectively, the Schwab Funds, the Laudus Funds and the Schwab ETFs are the Funds) have delegated the responsibility for voting proxies to CSIM through their respective investment advisory agreements. The Trustees have adopted these Proxy Policies with respect to proxies voted on behalf of the various Schwab Funds, Laudus Funds, and Schwab ETFs portfolios. CSIM will present amendments to the Trustees for approval. However, there may be circumstances where the Proxy Committee deems it advisable to amend the Proxy Policies between regular Schwab Funds, Laudus Funds and Schwab ETFs Board meetings. In such cases, the Trustees will be asked to ratify any changes at the next regular meeting of the Board.
To assist CSIM in its responsibility for voting proxies and the overall proxy voting process, CSIM has retained Glass Lewis & Co. (Glass Lewis) as an expert in the proxy voting and corporate governance area. The services provided by Glass Lewis include in-depth research, global issuer analysis, and voting recommendations as well as vote execution, reporting and record keeping.
The Proxy Committee has the ultimate responsibility for making the determination of how to vote the shares to seek to maximize the value of that particular holding.
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II. | PHILOSOPHY |
CSIM believes that its role as a fiduciary is of utmost importance. In voting proxy ballots, CSIMs ultimate objective is to maximize the value of our clients investments by protecting the long term best interests of shareholders. CSIM believes that directors, as shareholders elected representatives, are best positioned to oversee the management of companies in which its clients invest, thereby promoting and protecting its clients long term interests. Therefore, CSIM will generally support the boards recommendations unless concerns arise, such as the boards performance, accountability or management of conflicts of interests.
CSIM invests on behalf of its clients in companies domiciled all over the world. Since corporate governance standards and best practices differ by country and jurisdiction, the market context is taken into account in the analysis of proposals. Furthermore, there are instances where CSIM may determine that voting is not in the best interests of its clients (typically due to costs or to trading restrictions) and will refrain from submitting votes.
III. | PROXY VOTING GUIDELINES |
The Proxy Committee receives and reviews Glass Lewis written proxy voting policies and procedures (Glass Lewis Proxy Policies). Positions on proposals are evaluated by the Proxy Committee in the long term best interests of shareholders. Below is a description of CSIMs guidelines on key proposals. In other circumstances, CSIM generally will utilize the Glass Lewis Proxy Policies (which are posted on the Funds website).
A. | DIRECTORS AND AUDITORS |
i. | Directors |
As a starting point, CSIM expects the board to be composed of a majority of independent directors and to be responsive to shareholders. CSIM also expects directors that serve on a companys nominating, compensation or audit committee to be independent.
Factors that may result in a vote against one or more directors:
| The board is not majority independent |
| Non-independent directors serve on the nominating, compensation or audit committees |
| Director recently failed to attend at least 75% of meetings or serves on an excessive number of publically traded company boards |
| Directors approved executive compensation schemes that appear misaligned with shareholders interests |
| Director recently acted in a manner inconsistent with the CSIM Proxy Procedures or failed to be responsive to concerns of a majority of shareholders |
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ii. | Auditors |
CSIM typically supports the ratification of auditors unless CSIM believes that the auditors independence may have been compromised.
Factors that may result in a vote against the ratification of auditors:
| Audit-related fees are more than half of the total fees paid by the company to the audit firm |
| A recent material restatement of annual financial statements |
B. | BOARD MATTERS |
i. | Classified Boards |
CSIM generally defers to managements recommendation for classified board proposals unless CSIM has particular concerns regarding the boards accountability or responsiveness to shareholders.
Factors that may result in a vote supporting a shareholder proposal to de-classify a board:
| The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings |
| The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting |
| The company had material financial statement restatements |
| The companys board adopted a poison pill during the past years and did not put it up for shareholder approval |
ii. | Majority Voting |
CSIM generally supports majority voting proposals when they call for plurality voting standards in contested elections.
iii. | Cumulative Voting |
CSIM typically supports the concept of voting rights being proportional to shareholders economic stake in the company. Therefore, CSIM will generally not support cumulative voting proposals unless the company has a controlling shareholder or shareholder group and has plurality voting standards.
iv. | Proxy Access |
CSIM generally defers to managements recommendation for proxy access proposals unless CSIM has particular concerns regarding the boards accountability or responsiveness to shareholders.
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Factors that may result in a vote supporting proxy access:
| The company did not implement a shareholder proposal that was passed by shareholders at two previous shareholder meetings |
| The company nominated directors for election that did not receive a majority of shareholder support at the previous shareholder meeting |
| The company had material financial statement restatements |
| The companys board adopted a poison pill during the past years and did not put it up for shareholder approval |
v. | Independent Chair |
CSIM believes that the board is typically best positioned to determine its leadership structure. Therefore, CSIM will typically not support proposals requiring an independent chairman unless CSIM has concerns regarding the companys stock price performance. CSIM finds a companys stock price performance especially concerning when a company is at the bottom quartile of its level 2 Global Industry Classification Standard (GICS) group for the prior three consecutive years.
C. | COMPENSATION |
i. | Advisory Vote on Executive Compensation and Frequency |
CSIM generally supports advisory votes on executive compensation (also known as Say-On-Pay) when the compensation scheme appears aligned with shareholder economic interests and lacks problematic features.
Factors that may result in a vote against Say-On-Pay:
| Executive compensation is out of line with industry peers considering the companys performance over time |
| Plan includes significant guaranteed bonuses or has a low amount of compensation at risk |
| Executive compensation plans offers excessive perquisites, tax-gross up provisions, or golden parachutes |
CSIM typically supports annual advisory votes on executive compensation.
ii. | Equity Award Plans |
CSIM generally supports stock-based compensation plans when they do not overly dilute shareholders by providing participants with excessive awards and lack problematic features.
Factors that may result in a vote against Equity Compensation Plans:
| Plans total potential dilution appears excessive |
| Plans burn rate appears excessive compared to industry peers |
| Plan allows for the re-pricing of options without shareholder approval |
| Plan has an evergreen feature |
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iii. | Employee Stock Purchase Plans |
CSIM supports the concept of broad employee participation in a companys equity. Therefore, CSIM typically supports employee stock purchase plans when the shares can be purchased at 85% or more of the shares market value.
iv. | Re-price/Exchange Option Plans |
CSIM generally only supports managements proposals to re-price options when the plan excludes senior management and directors, does not excessively dilute shareholders, and the company has not significantly underperformed its industry peers over time.
D. | ANTI-TAKEOVER ISSUES |
i. | Shareholder Rights Plan |
Shareholder Rights Plans (also known as Poison Pills) constrains a potential acquirers ability to buy shares in a company above a certain threshold without the approval of the companys board of directors. While a poison pill may help a company in achieving a higher bid, it may also entrench the incumbent management and board. CSIM believes that shareholders should have the right to approve a poison pill within a year of its adoption. CSIM generally votes against poison pills that do not have safeguards to protect shareholder interests.
Factors that may result in a vote against Shareholder Rights Plans:
| Plan does not expire in a relatively short time horizon |
| Plan does not have a well-crafted permitted bid or qualified offer feature that mandates shareholder votes in certain situations |
| Plan automatically renews without shareholder approval |
| Companys corporate governance profile |
ii. | Right to Call Special Meeting |
CSIM generally votes against the right to call a special meeting unless the threshold to call a special meeting is 25% or more of shares outstanding to avoid wasting corporate resources.
iii. | Right to Act by Written Consent |
CSIM generally votes against the right to act by written consent if the company already offers the right the call special meetings. CSIM expects appropriate mechanisms for implementation including that the threshold to request that the company establish a record date to determine which shareholders are entitled to act be 25% or more of shares outstanding.
vi. | Supermajority Voting |
CSIM generally supports the concept of simple majority standards to pass proposals.
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E. | CAPITAL STRUCTURE, MERGERS AND ACQUISITIONS |
i. | Increase in Authorized Common Shares |
CSIM typically supports proposals to increase the authorized shares unless the company does not sufficiently justify the need for the use of the proposed shares.
ii. | Preferred Shares |
CSIM generally supports proposals to create a class of preferred shares with specific voting, dividend, conversion and other rights.
iii. | Mergers and Acquisitions |
CSIM generally supports transactions that appear to maximize shareholder value. In assessing the proposals, CSIM considers the proposed mergers strategic rationale, the offer premium, the boards oversight of the sales process, and other pertinent factors.
F. | ENVIRONMENTAL AND SOCIAL PROPOSALS |
Environmental and Social shareholder proposals typically request companies to change their business practices or to enhance their disclosures. CSIM believes that in most instances, the board is best positioned to evaluate the impact of these proposals on the companys business. Therefore, CSIM generally defer to the boards recommendation unless the proposal has successfully articulated a demonstrable tangible economic impact on shareholder value.
i. | Political Contribution and social proposals |
CSIM expects the boards of directors to have an oversight process for political contributions and lobbying proposals. CSIM generally votes against political spending shareholder proposals unless there is no evidence of board oversight.
IV. | ADMINISTRATION |
A. | CONFLICTS OF INTERESTS |
With respect to proxies of a Fund, the Proxy Committee will vote such proxies in the same proportion as the vote of all other shareholders of the Fund (i.e., echo vote), unless otherwise required by law. When required by law or applicable exemptive order, the Proxy Committee will also echo vote proxies of an unaffiliated mutual fund or exchange traded fund (ETF). For example, certain exemptive orders issued to the Funds by the Securities and Exchange Commission and Section 12(d)(1)(F) of the Investment Company Act of 1940, as amended, require the Funds, under certain circumstances, to echo vote proxies of registered investment companies that serve as underlying investments of the Funds. When not required to echo vote, the Proxy Committee will delegate to Glass Lewis responsibility for voting proxies of an unaffiliated mutual fund or ETF in accordance with CSIMs Proxy Policies.
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In addition, with respect to holdings of The Charles Schwab Corporation (CSC) (ticker symbol: SCHW), the Proxy Committee will vote such proxies in the same proportion as the vote of all other shareholders of CSC (i.e., echo vote), unless otherwise required by law.
Except as described above for proxies solicited by the Funds or CSC and the items described under the Proxy Voting Guidelines above, proxy issues that present material conflicts of interest between CSIM, and/or any of its affiliates, and CSIMs clients will be delegated to Glass Lewis responsibility for voting such proxies in accordance with CSIMs Proxy Policies.
B. | FOREIGN SECURITIES/SHAREBLOCKING |
CSIM has arrangements with Glass Lewis for the execution of proxy votes. However, voting proxies with respect to shares of foreign securities may involve significantly greater effort and corresponding cost than voting proxies with respect to domestic securities, due to the variety of regulatory schemes and corporate practices in foreign countries with respect to proxy voting. Problems voting foreign proxies may include the following:
| proxy statements and ballots written in a foreign language; |
| untimely and/or inadequate notice of shareholder meetings; |
| restrictions of foreigners ability to exercise votes; |
| requirements to vote proxies in person; |
| requirements to provide local agents with power of attorney to facilitate CSIMs voting instructions. |
In consideration of the foregoing issues, Glass Lewis uses its best-efforts to vote foreign proxies. As part of its ongoing oversight, the Proxy Committee will monitor the voting of foreign proxies to determine whether all reasonable steps are taken to vote foreign proxies. If the Proxy Committee determines that the cost associated with the attempt to vote outweighs the potential benefits clients may derive from voting, the Proxy Committee may decide not to attempt to vote. In addition, certain foreign countries impose restrictions on the sale of securities for a period of time before and/or after the shareholder meeting. To avoid these trading restrictions, the Proxy Committee instructs Glass Lewis not to vote such foreign proxies.
C. | SECURITIES LENDING |
Certain of the Funds enter into securities lending arrangements with lending agents to generate additional revenue for their portfolios. In securities lending arrangements, any voting rights that accompany the loaned securities generally pass to the borrower of the securities, but the lender retains the right to recall a security and may then exercise the securitys voting rights. In order to vote the proxies of securities out on loan, the securities must be recalled prior to the established record date. CSIM will use its best efforts to recall a Funds securities on loan and vote such securities proxies if (a) the proxy relates to a special meeting of shareholders of the issuer (as opposed to the issuers annual meeting of shareholders), or (b) the Fund owns more than 5% of the outstanding shares of the issuer. Further, it is CSIMs policy to use its best efforts to recall securities on loan and vote such securities proxies if CSIM determines that the proxies involve a material event affecting the loaned securities. CSIM may utilize third-party service providers to assist it in identifying and evaluating whether an event is material. CSIM may also recall securities on loan and vote such securities proxies in its discretion.
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D. | SUB-ADVISORY RELATIONSHIPS |
Where CSIM has delegated day-to-day investment management responsibilities to an investment sub-adviser, CSIM may (but generally does not) delegate proxy voting responsibility to such investment sub-adviser. Each sub-adviser to whom proxy voting responsibility has been delegated will be required to review all proxy solicitation material and to exercise the voting rights associated with the securities it has been allocated in the best interest of each investment company and its shareholders, or other client. Prior to delegating the proxy voting responsibility, CSIM will review each sub-advisers proxy voting policy to determine whether it believes that each sub-advisers proxy voting policy is generally consistent with the maximization of economic benefits to the investment company or other client.
E. | REPORTING AND RECORD RETENTION |
CSIM will maintain, or cause Glass Lewis to maintain, records that identify the manner in which proxies have been voted (or not voted) on behalf of CSIM clients. CSIM will comply with all applicable rules and regulations regarding disclosure of its or its clients proxy voting records and procedures.
CSIM will retain all proxy voting materials and supporting documentation as required under the Investment Advisers Act of 1940 and the rules and regulations thereunder.
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